7 CRITICAL FACTORS TO DRIVE DISTRIBUTOR EXCELLENCE IN AFRICA

HOW TO DRIVE DISTRIBUTOR PERFORMANCE IN AFRICA

Distributors or Distribution Partners (DPs) are an important and integral feature of Africa’s Sales and Distribution network. Africa’s marketplace is littered with DPs of different sizes and varied expertise distributing a vast array of consumer goods. FMCG Suppliers rely on DPs to execute the Route to Market (RTM) Strategy flawlessly, grow sales and revenue, and market share. How then can Suppliers drive Distributor excellence and performance in the fiercely competitive African marketplace?

Suppliers will do well to consider these 7 CRITICAL FACTORS to Drive Distributor Performance:

1. CLEARLY ARTICULATE YOUR RTM STRATEGY:

First, define your Route to Market (RTM) Strategy. Where will you play and how are you going to play? Fish where the fish are – don’t just cast your net and hope for the best. Your RTM Strategy will determine who your select as your Distributor Partners. The DP must be aligned to your Supplier led RTM Strategy.

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2. DEFINE YOUR CHANNEL APPROACH:?

It is critical to determine which channels are relevant to your brands and offering – and give you maximum distribution reach. Please prioritize your channels, and define targets, pricing regimen, margins, and incentives for each. Not all channels are created equal – and you cannot be in all channels.

?3. SEGMENT YOUR OUTLETS:?

Segmented execution is critical to success. Segment your outlets based on volume, profitability, or strategic importance. Your first tier of outlets (Gold Outlets) should be contributing 80% or so to your volume/revenue. You then must link the various customer segments to a customer service policy which determines how you will serve them.

4. UNDERSTAND YOUR COMPETITORS:

How can you equip your DPs for success when you don’t know your competitors’ tactics? You need to understand your competitors’ strategy and approach so that firstly you choose the right DPs and then equip them with a winning Strategy to win in the market.

5. LOCALISE RTM STRATEGY:

Any RTM Strategy will succeed if it takes local conditions into account. FMCG Suppliers must understand the local conditions and dynamics first, and use these conditions as the basis for the RTM approach.

6. MANAGE YOUR TOTAL COST TO SERVE (TCTS)

To succeed in the market, it is imperative that the FMCG Supplier and DP understand the Total Cost to Serve and all the variables. Such knowledge will be critical when determining and reviewing where and how to play in the market.

7. SET GROWTH TARGETS LINKED TO INCENTIVES

You must define clear total company targets (for example, volume, profit, share, brand distribution, display, by brand, channel, by geo, etc) and they need to be cascaded and clearly explained to the key individuals and DPs charged with delivery. These targets need to be backed up with?SMART?Incentives that are easy to understand. Such targets and incentives must be reviewed periodically and be in line with the company strategy.

Where to from here? Please reach out to me directly if you need help in growing or managing your DPs or with any RTM matter. You may follow my weekly #AFRICANRTMLEADERSHIP Series newsletter for more #RTM content. #DUMISANISIZIBA